NEW DELHI, June 25: The Core Group of Secretaries on Wednesday approved the disinvestment of government equity in Mahanagar Telephone Nigam Limited (MTNL), Container Corporation of India Limited (Concor) and Gas Authority of India Limited (GAIL). The group's recommendations would now be forwarded to the Cabinet for approval.

The approval permits offloading of 25 per cent equity in GAIL amounting to 21 crore shares. About 18 crore shares would be sold in the GDR market at an average price of Rs 153 per share while the remainder would be offloaded to domestic institutional and small investors at a price discount of 10 per cent on the international price to mop up about Rs 3200 crore.

The disinvestment in GAIL would however be undertaken only after prices of natural gas have been hiked in consonance with the Shankar Committee report. The price hike would improve the profitability of GAIL and would fetch better prices, said sources.

The group also approved the Ministry's proposal for disallowing GAIL from coming out with a fresh public issue as this would expand the paid up capital and lower the per share price.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.